Digitally Transform Your Back-Office Operations

The insurance sector in particular is moving toward digitally enabled processes to enhance customer, employee and business or vendor partner experiences, as well as to help streamline product development and key functions like claims and underwriting. Insurers know that, just like organizations outside of their sector, they can achieve significant competitive advantages and set forth a path for long-term growth by digitally transforming.

But most savvy insurers also understand that efforts to digitally transform customer-facing systems and other front-office processes are limited without also going digital with back-office operations. The back office, in fact, has long been ignored and still carries a number of tedious manual processes. So, when an insurance company digitally transforms its front-end systems and fails to do so with its back office, it’s fostering a disconnect that can impact company-wide communication and the customer experience, hold back productivity, and inhibit innovation and scalability. One back-office area in particular that could be optimized with digitization is the mailroom and process email in-boxes.

Overcome the communications deluge, process inefficiencies, high costs

Manual processing has prevailed as the traditional method for processing mail assets, but its weaknesses and inefficiencies have shone through. Consider the number of notifications, email messages and attachments, and other communications — including unstructured correspondence like letters — that bombard the average insurance company. For a midsize insurance company, the pieces of correspondence could number between 10 million and 12 million a year.

While processing the incoming electronic communications is fairly straightforward, rapidly processing unstructured communications — that is, quickly opening, reading, analyzing, sorting, and forwarding to the right department or person — remains a challenge. And imagine the communications breakdown if an employee is sick during a peak period of incoming correspondence, for example. Not only are these manual efforts inefficient, they are subject to human error and privacy risk.

Processing regulatory compliance-related correspondence in also an issue. Such correspondence must be handled quickly and time stamped accurately to eliminate any complications and risks associated with audits. Paper documents can make it difficult to prove when a mailroom received a particular request, as the physical stamps can be easily obscured. When this occurs, auditors must look back to earlier dates to determine compliance. This can set up an insurer for some close calls.

Re-engineer the mailroom through digital transformation

Given the communications deluge, the demand for expeditiousness and the inefficiencies connected with manual processing — not to mention the costs of internal physical delivery and storage — forward-thinking insurers are looking for a solution to optimize and accelerate back-office operations like processing mail assets. The answer lies in creating a hybrid mailroom and scanning service that unifies all incoming correspondence regardless of its original format and origin (that is, physical mail assets and process email in-boxes) into a common digital format.

Once made digital, mail assets can be analyzed to determine their level of importance, and routed to the appropriate department or person to best handle the correspondence. For example, natural language processing can be applied to an email sent to a customer service process email in-box to determine sentiment. Then, depending on the tone of the correspondence, it will be passed to the best agent to handle the issue. The same analytics can be applied to unstructured assets. For example, a paper claim form sent in can be digitized, analyzed for severity and routed to the appropriate adjuster for faster processing. By unifying mail assets, employees have access to all incoming correspondence in real time, greatly expediting the entire mail room process.

Clearly, digitizing and unifying mail assets can have a significant impact on productivity, operational costs, and the employee and customer experience. It also protects an insurance company from regulatory hiccups. By converting paper assets to digital at the point of entry, insurance companies create a digital “paper trail” that minimizes regulatory risks. Better records and information management mean fewer missteps during audits.

Best practices for digitally transforming back-office operations

Insurance companies can take a few simple steps to move toward digital transformation in the back office.

Assess the current state. Begin by determining the approximate volume of mail assets that are received daily, and the steps that must be taken to process them. Track how and how quickly these assets move through the organization and where backlogs exist. Quantify approximately how much money can be saved by streamlining the processes. The closer you can come to hard numbers, the stronger your case for digital transformation will be when presenting to the executive team.

Get executive buy in. Without buy in from the C-suite, it’s unlikely any digital transformation initiative will take hold. When presenting to executives, lead with the expected business benefits and, as mentioned earlier, present hard numbers that quantify the value. Emphasize not just the technology that will enable digital transformation, but also how the change in processing mail assets more efficiently will drive overall business benefits and a path for the future.

Assemble a team. As with any digital transformation initiative, success can be found only with the right combination of people, processes and technologies. The “people” part, if overlooked, can doom any digital transformation initiative. With that in mind, ensure that all pertinent parties are represented in the team that will spearhead the initiative. That means IT must be involved, as well as employees that are familiar with and well-versed in the day-to-day operations of the mail room. Mid-level managers should also be included to help ensure everything tracks back to the business objectives originally stated.

Create a plan of attack. Keeping in mind the ultimate objective to digitally transform back-office processes and gain efficiencies, map out the specific steps that must be taken to achieve the stated objectives. To create a sense of community and make team members feel invested in the project, assign tasks to everyone involved.

Look for opportunities to use technology for streamlining. When walking through and evaluating back-office processes, be specific in identifying those that can benefit from the latest digital innovations. Digital transformation may not require an entire rip and replace of a current system; rather, there may be components that can be swapped out for less involved technology deployments or even new processes that can deliver greater efficiencies.

Partner with an expert. Digital transformation can be a Herculean undertaking that can last several years. Before diving in to a project of this magnitude, consider partnering with an expert to help navigate the entire back-office digital transformation journey. Canon Business Process Services can help by first assessing a company’s current state, identifying processes that can streamline operations, and delivering technology to help put ideas into action.

The Canon solution includes mail center staff (either on site or off), digital mail system and installation, imaging hardware, mail-processing workflow design based on Six Sigma methodology, customer service support, and comprehensive reporting. With this end-to-end turnkey solution in place, insurance companies can cut costs, improve operational efficiency, enhance the customer experience, and improve visibility into, and control over, digital and unstructured correspondence.

Today, digital is the great disruptor, rippling across all sectors. New markets and new competitors are driven by digital technologies, and with them come new customers and greater customer (and employee) expectations. Digital is forcing businesses in all sectors to do more with less, to provide superior experiences, and to deliver on their promises faster and with more agility. In this environment, the organizations that transform quickly and use digital to pursue new business models and new revenue streams will survive and thrive.

But true digital transformation involves more than just the front-office, customer-facing systems in an organization. In fact, insurance companies have a lot to lose when they overlook their back office — the mail room, specifically — in their digital transformation initiatives. Every day, the flow of correspondence into an insurance company consumes a large amount of time and expense that could be funneled into higher priority processes. Risks associated with mishandled, lost, or lagging communications and mail assets can impact operations, regulatory compliance, and even customer experience and loyalty. These all conspire to hobble an insurance company’s growth and competitive edge in the long run. In short, an insurance company can’t reap all the benefits of digital transformation by transforming only one-half of its business operations.

Digital transformation in the mailroom involves replacing previously manual processes with systems that leverage analytics and automation for efficiency, consistency in delivery, and greater accuracy. Indeed, by extending these benefits to back-office operations, insurance companies have a significant opportunity to meet the demands of doing business in the modern world, while dramatically improving information management, customer experience and compliance.